IWD vs. IWR: What’s The Difference?

The iShares Russell 1000 Value ETF (IWD) and the iShares Russell Mid-Cap ETF (IWR) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and IWR is a iShares Mid-Cap Blend fund. So, what’s the difference between IWD and IWR? And which fund is better?

IWD and IWR have the same expense ratio: 0.19%. IWD also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IWD has provided lower returns than IWR over the past ten years.

In this article, we’ll compare IWD vs. IWR. We’ll look at fund composition and portfolio growth, as well as at their risk metrics and annual returns. Moreover, I’ll also discuss IWD’s and IWR’s industry exposure, performance, and holdings and examine how these affect their overall returns.

Summary

IWD IWR
Name iShares Russell 1000 Value ETF iShares Russell Mid-Cap ETF
Category Large Value Mid-Cap Blend
Issuer iShares iShares
AUM 54.1B 29.84B
Avg. Return 11.40% 14.15%
Div. Yield 1.57% 0.99%
Expense Ratio 0.19% 0.19%

The iShares Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.

The iShares Russell Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% with an expense ratio of 0.19%.

IWD’s dividend yield is 0.58% higher than that of IWR (1.57% vs. 0.99%). Also, IWD yielded on average 2.75% less per year over the past decade (11.40% vs. 14.15%). IWD and IWR have the same expense ratio: 0.19%.

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Fund Composition

Industry Exposure

IWD vs. IWR - Industry Exposure

IWD IWR
Technology 10.28% 19.67%
Industrials 11.77% 14.54%
Energy 4.76% 3.48%
Communication Services 8.67% 4.64%
Utilities 4.88% 4.46%
Healthcare 17.78% 11.76%
Consumer Defensive 7.76% 3.82%
Real Estate 4.94% 8.31%
Financial Services 20.43% 11.64%
Consumer Cyclical 5.62% 13.59%
Basic Materials 3.1% 4.1%

The iShares Russell 1000 Value ETF (IWD) has the most exposure to the Financial Services sector at 20.43%. This is followed by Healthcare and Industrials at 17.78% and 11.77% respectively. Energy (4.76%), Utilities (4.88%), and Real Estate (4.94%) only make up 14.58% of the fund’s total assets.

IWD’s mid-section with moderate exposure is comprised of Consumer Cyclical, Consumer Defensive, Communication Services, Technology, and Industrials stocks at 5.62%, 7.76%, 8.67%, 10.28%, and 11.77%.

The iShares Russell Mid-Cap ETF (IWR) has the most exposure to the Technology sector at 19.67%. This is followed by Industrials and Consumer Cyclical at 14.54% and 13.59% respectively. Consumer Defensive (3.82%), Basic Materials (4.1%), and Utilities (4.46%) only make up 12.38% of the fund’s total assets.

IWR’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Healthcare, and Consumer Cyclical stocks at 4.64%, 8.31%, 11.64%, 11.76%, and 13.59%.

IWD is 8.79% more exposed to the Financial Services sector than IWR (20.43% vs 11.64%). IWD’s exposure to Healthcare and Industrials stocks is 6.02% higher and 2.77% lower respectively (17.78% vs. 11.76% and 11.77% vs. 14.54%). In total, Energy, Utilities, and Real Estate also make up 1.67% less of the fund’s holdings compared to IWR (14.58% vs. 16.25%).

Holdings

IWD - Holdings

IWD Holdings Weight
Berkshire Hathaway Inc Class B 2.58%
JPMorgan Chase & Co 2.25%
Johnson & Johnson 2.24%
UnitedHealth Group Inc 1.78%
Procter & Gamble Co 1.71%
The Walt Disney Co 1.5%
Bank of America Corp 1.43%
Comcast Corp Class A 1.33%
Exxon Mobil Corp 1.2%
Pfizer Inc 1.18%

IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.

The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.

IWR - Holdings

IWR Holdings Weight
IDEXX Laboratories Inc 0.51%
DocuSign Inc 0.51%
Twitter Inc 0.48%
Chipotle Mexican Grill Inc 0.47%
Roku Inc Class A 0.44%
Marvell Technology Inc 0.44%
DexCom Inc 0.44%
Trane Technologies PLC 0.43%
MSCI Inc 0.43%
Carrier Global Corp Ordinary Shares 0.43%

IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.

Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.

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Risk Analysis

IWD IWR
Mean Return 1.03 1.17
R-squared 92.38 91.52
Std. Deviation 14.35 15.66
Alpha -3.23 -2.8
Beta 1.02 1.11
Sharpe Ratio 0.81 0.86
Treynor Ratio 11.06 11.72

The iShares Russell 1000 Value ETF (IWD) has a Mean Return of 1.03 with a Treynor Ratio of 11.06 and a Alpha of -3.23. Its Standard Deviation is 14.35 while IWD’s R-squared is 92.38. Furthermore, the fund has a Sharpe Ratio of 0.81 and a Beta of 1.02.

The iShares Russell Mid-Cap ETF (IWR) has a Treynor Ratio of 11.72 with a Sharpe Ratio of 0.86 and a Standard Deviation of 15.66. Its Alpha is -2.8 while IWR’s R-squared is 91.52. Furthermore, the fund has a Beta of 1.11 and a Mean Return of 1.17.

IWD’s Mean Return is 0.14 points lower than that of IWR and its R-squared is 0.86 points higher. With a Standard Deviation of 14.35, IWD is slightly less volatile than IWR. The Alpha and Beta of IWD are 0.43 points lower and 0.09 points lower than IWR’s Alpha and Beta.

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Performance

Annual Returns

IWD vs. IWR - Annual Returns

Year IWD IWR
2020 2.67% 16.91%
2019 26.34% 30.31%
2018 -8.4% -9.13%
2017 13.47% 18.32%
2016 17.09% 13.58%
2015 -3.95% -2.57%
2014 13.21% 13.03%
2013 32.18% 34.5%
2012 17.28% 17.13%
2011 0.21% -1.67%
2010 15.3% 25.25%

IWD had its best year in 2013 with an annual return of 32.18%. IWD’s worst year over the past decade yielded -8.4% and occurred in 2018. In most years the iShares Russell 1000 Value ETF provided moderate returns such as in 2014, 2017, and 2010 where annual returns amounted to 13.21%, 13.47%, and 15.3% respectively.

The year 2013 was the strongest year for IWR, returning 34.5% on an annual basis. The poorest year for IWR in the last ten years was 2018, with a yield of -9.13%. Most years the iShares Russell Mid-Cap ETF has given investors modest returns, such as in 2016, 2020, and 2012, when gains were 13.58%, 16.91%, and 17.13% respectively.

Portfolio Growth

IWD vs. IWR - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWD $10,000 $30,746 11.40%
IWR $10,000 $39,751 14.15%

A $10,000 investment in IWD would have resulted in a final balance of $30,746. This is a profit of $20,746 over 11 years and amounts to a compound annual growth rate (CAGR) of 11.40%.

With a $10,000 investment in IWR, the end total would have been $39,751. This equates to a $29,751 profit over 11 years and a compound annual growth rate (CAGR) of 14.15%.

IWD’s CAGR is 2.75 percentage points lower than that of IWR and as a result, would have yielded $9,005 less on a $10,000 investment. Thus, IWD performed worse than IWR by 2.75% annually.


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